Land Business 201: Where You Should be in 2 years (LA 1330)

Land Business 201: Where You Should be in 2 years (LA 1330)

Transcript:

Steven Butala:
Steven and Hill here.

Jill DeWit:
Hello.

Steven Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.

Jill DeWit:
And I’m Jill DeWitt, broadcasting from sunny Southern California

Steven Butala:
Today, jill and I talk about land business 201, where you should be in two years. If you were with us yesterday, it was land business 101, a list of stuff you should do in the beginning. Tomorrow, it’ll be 301 and 401 and so forth. So, today, Jill is going to describe to us where we all should be in two years, what should happen between that first deal, we talked about getting to that first deal yesterday, and then from two years from that point, she’s going to lead us and tell us exactly how that’s supposed to go.

Jill DeWit:
Great.

Steven Butala:
I bet you a dollar there won’t be a lot of math and budgets in it. It’ll just be like, “Well, you should feel this and then do this deal.”

Jill DeWit:
We’re going to do it together. All good.

Steven Butala:
Before we get into it, let’s take a question posted by one of our members on the landinvestors.com online community. It’s free.

Jill DeWit:
David wrote, “In the training videos and equity planner, Steve says to offer 35%. In the video tonight, I thought I heard him say offer 20%, and now I am confused. What do you offer?”

Steven Butala:
So, I chose to include this question among tons of questions and comments on land investors for a couple of reasons. Number one, what David’s referring to is when you go into a county or a zip code, you’re going to establish a baseline average price for a property, what properties sell for in that geographic area. So, in a county, it might be a $1,200 an acre, and so we would offer either 20% or 35% of that, and a zip code, same thing. In a zip code, it would be, for a house, $180,000, so we offer a certain percentage of that or a certain dollar amount below that so we can buy it for cheaper and sell it for more. That’s my point, number one.
I will forever say this statement. There is no percentage. There’s no locked-in percentage. This is your business. This is a business that you’re going to start, and 20% might be incredibly appropriate in some county on the West coast where they’ve never seen an offer ever. This country’s packed, packed, full of counties where they’ve never, ever seen anyone… No one’s ever sent them an offer ever. The vast majority of the counties in this country are that way. If that’s the case… And you can determine very quickly if that’s the case or not by what’s for sale there. If there’s nothing for sale there, they probably never seen an offer. I would go in lower.
If for whatever, and I’m not sure why you would ever do this, you’re choosing a county like San Bernardino County or Mojave County, Arizona, or Costilla County, Colorado, where nine million people have sent letters because other people out there have said they’re secret counties, or for whatever reason, probably 35 to 40% might get you a better response rate. But I’ll say this, and here’s my big picture point and really why I included this, I say all kinds of stuff. Common sense applies here.

Jill DeWit:
He also says, “I can’t be responsible for what I say.” That’s one of the things he says.

Steven Butala:
If you were looking for a hard-

Jill DeWit:
I have something to add on this, too.

Steven Butala:
… you’re looking for a hard and fast way to print money out of an ATM machine in your basement, you are in the wrong place.

Jill DeWit:
I know some people that have sent out offers, say it was 20%, 25%, whatever, and they got a few great properties and they realize what the… They maybe they get into it, and they realize, “Wow, this is a great area. Things are worth more than I thought. I want more properties.” I know people that have done, like say 20%, and they’ve gone back and remailed at 30% because everything that they got their hands on sold so fast that they went back and made even higher offers to scoop up more property. So, I just want to say that’s another example of this is an ebb and flow, you’re going to change. There’s properties that you’re going to send at 20% or 25 or 30, whatever it is, and you’re going to go, “I wouldn’t pay 5% for that one, or 10%,” you’re going to come back and even tell the guy, “Look, I’ll take it off your hands, but here’s my number. And it’s really low because there’s something going on.” So, there’s no, like you said, there’s no hard and fast rule.

Steven Butala:
On any of this, and it’s not just pricing. Common sense really applies. If you talk to three convenience store owners in the same market, they’re going to have different prices for everything for a bunch of reasons, especially the ones who’ve been there for awhile. They’re going to say, “Yeah, I mean, I can get away with selling milk for six bucks and it flies off the shelf. There’s just a lot of people who buy milk in this neighborhood, but I can’t give away cigarettes,” or whatever. So, the 20% and 35% has to do with geography and what Jill said, timing and all kinds of stuff. And that’s not just pricing, that’s tons and tons of stuff in this business and, really, any business. you have to have an open mind, and you have to adapt and overcome, like the Marine Corps, or it’s not… Again, you don’t just stamp this stuff out. Which is why there’s so much profit. If it was just stamp it out, when you buy and sell house, you know you’re going to make… There’s various finite situations.

Jill DeWit:
Price per square foot.

Steven Butala:
I’m just talking about land here. Yeah.

Jill DeWit:
Like price per square foot’s pretty darn close.

Steven Butala:
Yeah. You know [inaudible 00:05:44].

Jill DeWit:
Within a 30 day period, you know what’s going to happen.

Steven Butala:
You’re not going to offer 20% of what a house is worth. You’re going to get laughed out of the neighborhood. That’s my point. But [inaudible 00:05:57] land business 201, where you should be in two years. This is why you’re listening.

Jill DeWit:
You just caught yourself. You’re like, “Whoops, going into dead horse mode.”

Steven Butala:
Dead horse. Don’t beat a dead horse.

Jill DeWit:
Beating a dead horse. You were starting to go into that mode. You caught yourself. Good one. Good job. I’m proud of you. That’s usually my job. Actually, no, it wasn’t. Well, I’m famous for… Well, hopefully it’s not this way anymore, but I used to be so bad about beating the dead horse, number one, and then, two, really putting my foot in my mouth. I was pretty good at that one. You can tell me. On a scale of one to 10, how am I doing?

Steven Butala:
You haven’t mixed a cliche in quite some time.

Jill DeWit:
No. Actually, that’s another problem.

Steven Butala:
My all-time cliche mix that Jill’s ever said is the Duracell rabbit. Every marketer who’s ever worked on an Energizer bunny campaign just fell out of their… They quit their job. They’ve spent billions of dollars branding the Energizer bunny, and she comes up with the Duracell rabbit.

Jill DeWit:
Do you know what’s really funny, too? We have a really good friend who owns a restaurant here in town. Her neighbor is the Got Milk? guy. Did you know that?

Steven Butala:
Yes, I did.

Jill DeWit:
I think that’s so funny. What do you do after that?

Steven Butala:
I don’t know.

Jill DeWit:
And you just walk around saying, “I’m the Got Milk? guy and just leave it at that, like Jared the Subway thing? We all knew Jared from subway, and then we learned Jared from other ways, which weren’t so great stuff.

Steven Butala:
That’s a good question. That’s where this whole week is leading. What do you do after you won? Well, we’ll talk about that on Friday.

Jill DeWit:
Okay. Yeah. Friday is the one. Okay, good.

Steven Butala:
It’s 501.

Jill DeWit:
Okay. So, today’s where you should be in two years. Okay. So, yesterday, we talked about all… That was a laundry list. If you took notes, I would encourage you to read the transcript. That might be easier than taking notes, and you could get the excerpts out of there. And that’s on our website, by the way. We never really talk about that. If you really want to know, the transcripts from our shows are on the website, our website, so you can find that, which is over my shoulder right here. So, where should you be in two years? Well, you’re still doing it. It made the cut. You’re obviously making money. So, I hope-

Steven Butala:
And you like it.

Jill DeWit:
Exactly. And you figured a lot out. I hope that in two years you’re not working on deal number two. That’s where you should not be. So, in two years, you should be on deal… Let me think about this. I’m going to go between 50 and 100. What do you think?

Steven Butala:
So, that’s very personal. For [inaudible 00:08:41] 50 to 100 is probably light. I know it is. There are people in the advanced group who do one deal a month. They just make 100 grand doing it, and they have all the answers. And that’s it. So, it’s not so much. Again, right at the beginning of the show, I’m like, I’m all budgets and goals. At the beginning of yesterday’s show, I said, you got to have a goal, and you got to hit it. And that goal for yesterday was to do one deal, and then you graduate yourself for… Once you do that one deal, you have to sit down and have a real honest conversation with yourself about what you want to do. How many deals do you want to do? And I think for the first-

Jill DeWit:
I used to say 10.

Steven Butala:
I think for the first year, 10 deals is great.

Jill DeWit:
Well, that used to be my first thing. I used to tell people don’t make any decisions until you do 10 deals. I want you to just start and finish. I love you, but one, I think, is too light to have a… Because you’re not going to have as many things to go wrong. Do you think? [inaudible 00:09:37] 10.

Steven Butala:
I think it’s very personal. For me, all it took was that one deal, and I mean, I knew right there. But I think 10 deals is very realistic. Maybe for some people, it’s five.

Jill DeWit:
10 deals, your bank balance is different. Hopefully, nine went great, or eight went great. Two, you goofed up. You’re comfortable talking to sellers, you’re comfortable talking to buyers, you know how to post property. That’s all the stuff I want. That’s why 10 deals, you feel better.

Steven Butala:
I mean, this is a perfect example, like Jill and I have a different threshold.

Jill DeWit:
That’s true.

Steven Butala:
And we’re lifelong partners in this.

Jill DeWit:
It’s okay to disagree.

Steven Butala:
Yeah. Yeah. It’s okay to have a different goal.

Jill DeWit:
Right. All right. I’ll say where I think you should be in two years. Maybe we should even do this. And you [inaudible 00:10:23] say where you should be in two years because it might be different.

Steven Butala:
All right.

Jill DeWit:
Okay. So, I think in two years, depending on the type of deals you want to do in your balance that, of course, will dictate… Most people coming new to this right out of the gate aren’t going to come in and go, “All of my deals are buy for 50,000 and sell for 150,000, or something like that. I don’t know many people that come out like that. I think it’s more like i buy for two or 3,000, I sell for nine, and then I graduate to buy for 5,000, I sell for 12, and then I buy for 10,000. Now, it’s getting a little scary. And this is where I think you should be happening in the two years, you keep pushing the envelope. I had a consultant call with a guy yesterday in Idaho… What?

Steven Butala:
We’re just so similar when it comes to just pushing the envelope.

Jill DeWit:
Oh, yeah.

Steven Butala:
And today, we are pushing the envelope. Doing $100,000 deals, and we’re high fiving each other.

Jill DeWit:
Do you know what I find is so funny, like side note about you and I? Is you would think, as the woman, that I would be the one that says, “How big is that check are you writing? I’m not comfortable.”

Steven Butala:
It’s the opposite.

Jill DeWit:
I am reckless with the checkbook. I see it, I believe it in my soul, and I will die making it happen. I will write $125,000 check and not think about it because I know what’s going to happen. We have a rule, we have a limit up, limit down. We have our own little stop gap, if that’s right, too. We have to talk about it. There’s a certain number that we got to talk about it before that check’s getting written. Under that threshold, he’s like, “Have at it.” He can see it. He watches what I’m doing, buying and selling, so it’s nothing.
So, back to the two years. I hope you kept pushing yourself a little bit further until you’re now… I would love it, two years, you’re very comfortable buying for 10 or $15,000, at least, and selling for 30 to $50,000. And then, at the end of two years now, this is a prelude to tomorrow’s show, which is, “Now how do I want this to go?” I would also love you to test, if you haven’t yet, test doing some of the broker. You could buy $15,000 properties, easy.
Well, one of the properties that looks really good that you think you could sell for 70, get a broker involved, or even on the acquisition side, if you’re 18 months into this, you’re looking at a property and scratching your head, going, “Shucks, this a great deal. I really think this could be worth quite a bit,” get a broker’s opinion. Call three, hopefully two of them are going to get back to you, and one you’re going to love. And you’re going to test them and say, “You know what? All right…” He’s going to say something like, “I vote we market this for 80. I think we can get 65 in 30 days.” You’d be like, “Done, and I’m buying it for 15,000. I’m going to test this guy.” That’s the stuff I want you to do in two years.

Steven Butala:
It takes two years. Yesterday, we were talking about stuff your college professor said that would always stick with you. I don’t think I heard this in college, but somebody told me it takes two years to do anything. Somebody wrote a book called 10,000 Hours, I think.

Jill DeWit:
I remember that.

Steven Butala:
I think that was about soccer or something. It takes 10,000 hours to become a-

Jill DeWit:
Proficient.

Steven Butala:
… proficient or expert or… I know I’m misquoting it, but I know the book’s called 10,000 Hours. And I’ve never read it. I’ve only heard people talk about it and really [crosstalk 00:14:11].

Jill DeWit:
I think that’s five years.

Steven Butala:
Is it? Well, good. I mean, tomorrow, we’re going to talk about five years. Because it is five years.

Jill DeWit:
Again, not doing math in my head.

Steven Butala:
No, it is five years.

Jill DeWit:
Okay.

Steven Butala:
So, here. What you got after two years is a lot of practice. What you don’t want… I’m going to quote my mother, actually. Her take on education is this. To me

Jill DeWit:
Get inside. it’s late. Nothing good happens after 10:00 o’clock

Steven Butala:
That. But two years from now, it’s going to be two years from now.

Jill DeWit:
Yeah. Oh.

Steven Butala:
Jill doesn’t like that saying.

Jill DeWit:
I hate that saying, I don’t know why.

Steven Butala:
Why is that.

Jill DeWit:
Well, because I had a boss who used to tell me that, and she also said, “You can sleep when you’re dead,” and I didn’t like that one either.

Steven Butala:
I don’t understand that either.

Jill DeWit:
Okay. Thank you.

Steven Butala:
Two years from now, I mean, two years are going to go by, so how you fill that time between now and then is up to you. You can have 10 children and wreck your life.

Jill DeWit:
Not in two years.

Steven Butala:
All right. Well, you can have two children sort of wreck your life.

Jill DeWit:
Okay.

Steven Butala:
You can get married and unmarried in two years, easy. There’s a bunch of stuff you can do in the next two years, or you can buy and sell a ton of real estate and be on your way to financial independence for the rest of your life, and that’s the truth. So, practice that. By the end of two years, your fear should be entirely dissipated, and that bottleneck we talked about yesterday should be gone. You should be able to, like Jill just said, you should be pushing yourself to do bigger deals. You should be pulling up a deal on [inaudible 00:15:40], NeighborScoop, and you should be looking at it and saying, “Oh my God, yeah, I need to do this deal. I just need to make sure that X, Y, and Z… I’m on the phone with the planning and zoning right now to confirm that you can use the property the way I want it to be used and buy the deal.” Click, next review. It should be that fluid.
This is really important. By the end of your two years, or while you’re getting to your two years, after Jill’s 10 deals or one deal or whatever that number is for you, between 101 and 201, you need to have established success in your budget to actual calculation. Again, I use this guy all the time in our advanced group. He only wants to do one deal a month, and he puts his soul into that one deal. And he makes 100 grand every single month. He makes over a million dollars a year in net. So, for him, that’s his budget. Is he hitting the actual budget to actual? In his case, he is. There’s another guy in the advanced group who he just splatters it all over the place. Luke Smith. If you haven’t seen his show on YouTube, you should check it out. He’s been with us since like-

Jill DeWit:
Four years now?

Steven Butala:
He’s been with us since minute one.

Jill DeWit:
Early. Early on.

Steven Butala:
Really early on.

Jill DeWit:
Yeah.

Steven Butala:
And his style is very just splatter it. Throw it at the wall, see what sticks, and he’ll do any deal. He’ll buy up properties for $25, he’ll buy properties for $250,000. He’s got tons of partners. He’s just all over the place. So, is he hitting his budget to actual? I think some version of that’s happening. I wish somebody would’ve told me that a long time ago. You have to have a budget in everything. You have to. And it doesn’t stop there. You have to check to see where budget to actual is hitting. There are four niches in this land business that we have. I’m going to rip through them right now because, chances are-

Jill DeWit:
We’re going to talk about them tomorrow, too.

Steven Butala:
Right. Chances are, you’re just focusing on one and it’s probably rural vacant land like we focus on, but you can do in fill lots. We have a whole program on that that’s included in Land Academy. That’s number two. Number three is very, very, very inexpensive, $100 an acre desert squares. There are people that make whole careers out of that. Millions of dollars a year. And then, finally, specialization properties like properties that have been pre-zoned or civil engineered to be heavy industrial or hospital or-

Jill DeWit:
Motel.

Steven Butala:
… motel. Yeah. And there’s huge money in that, massive money in it, and it’s not that hard. So, you should either be in that already, thinking about doing a deal in that, or it should be in your plan to do a specialized mailer like that.
And then, finally, I think within that two year timeframe, geography should be heavily on your mind, if, in fact, you’re not… We have some very successful people who contact us and say… We have people calling us and saying this all the time that have been members for years. “You don’t know me at all. I joined in 2015, ’18, ’14… I mean, ’16. I took what you said. I took the first program, took it to heart, sent out mail in one county, then sent it out in another county and right next to it, and I never left. I’ve only ever been doing deals in those two counties. I sell it on terms. Now I’m into mobile homes. The whole thing over here, I’m helping these people do a subdivision.” So, that’s not my way. We like to move all over the place, but that’s just us. So, some people, and it’s usually where they live so they can drive there and there’s a social piece to it for them.
We have one person who solved access list property in Indiana, or in a few counties in Indiana, and that’s all he does. He buys ridiculously inexpensive, what people think are unusable property squares, there’s no access to it at all, and solves it because he knows everybody at the county. So, that’s like a specific little nichey thing that goes on right in some geography, you can make a career out of that. Or splitting property, too. So, those are the types of things that have to… By the end of two years, you should be having consistent money come in, probably paying yourself a salary, you should know what your specialization is, and you should be really thinking about what’s going to happen next. From an employee standpoint, I don’t know if you should have somebody working for you or not at that. What do you think?

Jill DeWit:
No, at the end of two years, I think you’re just now thinking about quitting your day job.

Steven Butala:
Okay. Good, Jill.

Jill DeWit:
That’s what I think.

Steven Butala:
I think you’re right.

Jill DeWit:
I think you tapped yourself out. That’s one thing that we feel real strongly about. Stay there until it doesn’t make sense to be there. You want to go, “Golly, now I’m losing money,” and I remember that. I remember that day and that feeling like, “Shucks, the time I spend on my day job, I could use this 40 hours, I would make so much more money.” And then I want you to stay there even longer because I want it to be no question, and I want you to put so much money in the bank that you feel so secure and you’re going to sleep really well. That’s what I want you to do.

Steven Butala:
That’s great advice, actually.

Jill DeWit:
And your wife is happy, too.

Steven Butala:
Yes.

Jill DeWit:
That’s one of the most important things. Thank you for joining us today. Happy you could be here. You can find this five days a week right here on the Land Academy Show.

Steven Butala:
Tomorrow, the episode on the Land Academy Show is, surprise, surprise, land business 301, you’re a specialized pro. You are not alone in your real estate ambition. This is fun.

Jill DeWit:
It is fun. It’s like I’m thinking back going, “Where were we..” So, we’re not the normal in two years, but I talk to people in two years, and it’s funny because… It’s interesting, I talked to a guy last week that is new Land Academy but not new to the business, and he has got himself… I think he started with somebody else based on the properties that he’s doing. He’s staying in a very few counties out west that we know really well, and all he’s done is built up term sales.

Steven Butala:
Oh, good.

Jill DeWit:
And he’s got his term sales now to about… He brings in comfortably $14,000 a month. I said, “That’s great.” He’s like, “We joined Land Academy, and I want to learn to really take it to the next level, number one. And number two, I want to go for some bigger cash transactions.” And it was so funny because he’s going from… So, he’s probably two years in. It’s him and his wife, and they have an investor when they need them. And again, he lives in Idaho. Hi, John. He was telling me the backstory and all the work that goes into it, and he’s buying them between like, I’m going to say, two and $10,000. Right? So, he’s got a lot of properties to have $14,000. So, they were doing $99 to $199 a month payments.

Steven Butala:
That’s a lot of deals.

Jill DeWit:
That’s a lot of deals.

Steven Butala:
That’s hundreds of deals.

Jill DeWit:
I said, “Oh, John, I got to tell you. What you’re about to do is a lot easier. It’s so much easier buying and selling for cash because when the deal closes, you’re done. You’re not managing this property this whole time. And the people that you speak to when you start doing these bigger deals and you go through escrow and do transactions that way, it’s a lot less.” I mean, the paperwork he’s doing right now, too, to set up the terms and the seller financing and the credit cards and all that, that’s a lot of work. I said, “It’s about to get a lot easier.’.

Steven Butala:
[inaudible 00:23:45] this is incredibly helpful, I think, for listeners. What else can you tell about this guy? Because he obviously figured it out.

Jill DeWit:
Oh, totally.

Steven Butala:
But he figured out something that we don’t even really talk about or teach that much, which is term sales.

Jill DeWit:
What he made work beautifully is the harder thing, and I’m like… What’s great is, too, I’d say, “What you’re doing right now, I say, if you want to do it our way, I’d say…” “I got $14,000 a month coming in.” Great, okay. Something crazy happens, and a large percentage of them stop paying, you can live on 10,000. Well, if you can’t live [inaudible 00:24:19] talk about that. If you can’t live on $10,000 a month right now, something’s wrong. So, you can live on $10,000 a month. All right? And pay the bills. So, you’ve got some wiggle room there. I said, “The fastest way to really build up a bank balance is cash deals. It’s like having a W2 job. That’s like a W2 job that’s paid for, everything’s paid for. Now you can really focus on this.” He’s like, “Yeah.”

Steven Butala:
So, did he ask you any questions? Or was this just a chat?

Jill DeWit:
No, it was really sweet. We laughed about it at the end because I said, “Did I get the job?” Because it was such a fun call that we did. It was a consulting call. And John had a well-thought-out planned list of serious questions for me. It was not really a conversation. It was, I answered the question, he goes, “Okay, onto the next question.” I answered the question, “Onto the next question.” [inaudible 00:25:24] I feel like I’m getting an interview here.

Steven Butala:
Did you get the job?

Jill DeWit:
He said I got the job. So, it was really good. It was so fun. I love it. And I actually liked those. It was a different consulting call for me because he planted it out so well, so thank you, John. Sometimes people are coming to these consulting calls and they don’t even really know what to ask. And it’s okay, too, because I can dig from them where they are in their career, in their land career, and then I can say, “All right, here’s what I think’s going on. Do you want to look at this, or do you want to go this direction? What seems best? And we’ll talk about it.” But he was like, “I know exactly what I want to ask you. It was really cute. It was awesome.

Steven Butala:
All right. So, I mean, the guy had a whole… I’m sorry. A whole list of… So, he planned that whole thing out?

Jill DeWit:
Oh, totally.

Steven Butala:
So, that’s how he does his business.

Jill DeWit:
Totally.

Steven Butala:
Plans it all out, executes it according to some schedule, and makes the best of 30 minutes or any given 30 or 60 minutes in his day.

Jill DeWit:
Exactly.

Steven Butala:
That’s a lot of this.

Jill DeWit:
That’s true. It was really good. I can tell he’s organized. He has to be to manage all those properties and those payments. He’s got his act together. You know what else? He’s doing his homework, and I appreciate that, too. He’s like, “Before I make this next step, I did all of this, I’m watching the program, I have these serious questions, and before I go into that.” And like I said, I really do appreciate that.

Steven Butala:
Awesome.

Jill DeWit:
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Jill DeWit:
We are Steve and Jill.

Steven Butala:
We are Steve and Jill. Information-

Jill DeWit:
And inspiration

Steven Butala:
… to buy undervalued property.

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